Coffee heat rising

AMEX Windfall…Disappointing and Not Disappointing

The annual rebate from Costco’s American Express arrived late last week. It was only $157, the lowest kickback I’ve ever received from that august credit card company. Compare with last year’s refund of $337, and the $210 they sent in 2009. Pretty pathetic.

Of course, what it says is that in 2010 I cut spending way, way back. The only major purchase I made was for M’hijito’s dryer—since he pays for everything in cash, we charged it on my card and he reimbursed me so I could get the kickback. If it hadn’t been for that purchase, the rebate would have been even less.

In one respect the small check is not so disappointing: it means I succeeded in cutting my budget to unheard-of low levels. Of course, that happened because I had to cut back: I had no money.

Like everyone else, evidently. Spending dropped drastically across the country as more and more Americans fell victim to layoffs, forced “retirements,” furloughs, and pay cuts.  Reports tell us we’ve seen a recent  uptick in consumer spending, with an increase of 4.4 percent in fourth-quarter 2010. That’s good for the economy, I guess. One could speculate about pent-up need, though: at some point along the line people simply have replace cars that crap out and household infrastructure items that break—such as M’hijito’s clothes dryer. As experience tells us, all these things are engineered to break at once. Will people keep on buying after they’ve replaced the things they can’t do without?

Oh well. I could’ve used a larger kickback. On the other hand, a couple of other windfalls blew in: the RASL payment and a couple of new jobs from new and old clients. So, what the heck. I’ve learned to limit spending, and don’t expect to increase it for the sheer joy of seeing a few extra pennies in the annual AMEX rebate.

How about you? Now that you’ve tightened your belt, do you intend to loosen spending if and when times get better, or will you continue to cultivate your new frugal habits?